Buccaneer Gas Pipeline Company, L.L.C.; Notice of Applications for Certificates

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. CP00-14-000, CP00-15-000, and CP00-16-000]

Buccaneer Gas Pipeline Company, L.L.C.; Notice of Applications

for Certificates

November 2, 1999.

Take notice that on October 28, 1999, Buccaneer Gas Pipeline

Company, L.L.C. (Buccaneer or Applicant), Post Office Box 1396,

Houston, Texas 77251, filed an application in Docket No. CP00-14-000

pursuant to and in accordance with Section 7(c) of the Natural Gas Act

(NGA) and the optional certificate procedures of Part 157(E) of the

Federal Energy Regulatory Commission's (Commission) regulations, for a

certificate of public convenience and necessity authorizing the

construction and operation of natural gas pipeline, compression,

measuring and other related facilities. On that same date Buccaneer

filed in Docket No. CP00-15-000 for a blanket certificate of public

convenience and necessity to render firm and interruptible

transportation services on an open access basis pursuant to Part 284(G)

of the Commission's regulations and for approval of initial rates.

Also, Buccaneer requests in Docket No. CP00-16-000 the issuance of a

blanket certificate of public convenience and necessity under Part

157(F) of the Commission's regulations authorizing certain facility

construction, operation and abandonment,\1\ all as more fully set forth

in the applications which are on file with the Commission and open to

public inspection. This filing may be viewed on the web at http://

www.ferc.us/online/rims.htm (call 202-208-2222).

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\1\ On September 30, 1999, Buccaneer previously filed for

certificate authorization to construct and operate these same

facilities and for blanket authorization under Part 284, Subpart G

and Part 157, Subpart F in Docket Nos. CP99-628-000, CP99-629-000,

and CP99-630-000, respectively. These applications were rejected

because of deficiencies in the environmental exhibits included in

Docket No. CP99-628-000.

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Pursuant to Section 157.102(b)(1) of the Commission's regulations,

Buccaneer (i) requests that the instant application be considered under

the optional procedures of Part 157(E) and (ii) agrees to comply with

all terms and conditions specified in Section 157.103.

Buccaneer requests that the Commission issue a preliminary

determination on the non-environmental aspects of this proposal

[[Page 60801]]

by February 1, 2000, and a final order granting the authorizations

requested herein by December 15, 2000. Buccaneer states that this

approval schedule is necessary to allow construction of the project to

be completed by April 1, 2002, the proposed in-service date for the

project. Buccaneer states that it is not currently engaged in any

natural gas transportation operations. Upon commencement of operations

proposed in this application, Buccaneer states that it will become a

``natural gas company'' within the meaning of Section 2(6) of the NGA

and, as such, will be subject to the jurisdiction of the Commission.

Buccaneer states that its natural gas pipeline project (``Buccaneer

Project'' or the ``Project'') is being proposed in response to the

rapidly growing market for natural gas service in the State of Florida,

where the natural gas requirements are expected to nearly double by the

year 2007. It is stated that the Project will be designed to transport

up to 900,000 dekatherms (dt) of natural gas per day. Buccaneer

estimates that the total cost of the Project will be $1,455,173,425.

Buccaneer is proposing a 75/25 debt to equity capital structure and

will seek non-recourse project financing.

Buccaneer states that the Project will consist of a new mainline

system which will commence in Mobile County, Alabama, and cross the

Gulf of Mexico to the west coast of Florida just north of Tampa. It is

stated that onshore, the pipeline will branch out in an easterly

direction to serve power generation plants and other markets across the

central part of the state. Buccaneer indicates that the pipeline system

will include a compressor station in Mobile County and a liquids

separation facility in Pasco County, Florida.

Specifically, the Buccaneer states that the Project will consist of

532.67-miles of 36-inch mainline pipeline in three major mainline

components: the Alabama Mainline, the Gulf of Mexico Mainline and the

Florida Mainline. It is stated that the 36-inch, 16.66 mile Alabama

Mainline will begin at Buccaneer's proposed Compressor Station 1 which

will be co-located with the existing compressor station of

Transcontinental Gas Pipe Line Corporation (Transco) in Mobile County,

Alabama and will include a 4.14-mile segment in Mobile County and a

12.52-mile segment in Alabama state waters, and will end at the

boundary between the Alabama state waters and federal waters in Mobile

Block 822, Offshore Alabama. Buccaneer states that the Gulf of Mexico

Mainline will consist of 376.77 miles of 36-inch mainline pipeline

beginning in Mobile Block 822, traversing the Mobile, Pensacola, Destin

Dome, Apalachicola, Florida, Middle Ground and Tarpon Springs Areas,

and ending at the boundary between federal waters and Florida state

waters in Tarpon Springs Block 901. Buccaneer indicates that the

Florida Mainline will consist of 139.24 miles of 36-inch mainline

pipeline beginning in Tarpon Springs Block 901, traversing Pasco, Polk

and Osceola Counties, Florida, and ending at the Project's milepost

20.68 in Orange County, Florida, where the mainline will branch into

16-inch and 30-inch laterals.

Buccaneer states that the 36-inch mainline mileposts are continuous

from Compressor Station 1 in Mobile County, Alabama to the liquids

separation facility in Pasco County, Florida. It is indicated that the

Florida Mainline consists of the Pasco, Polk, Osceola and Orange County

Mainlines and has a milepost system that begins at the boundary of each

Florida county. Buccaneer states that there will be three major lateral

systems and five small laterals which will branch from the Florida

Mainline. Buccaneer states that the 30-inch, 37.99-mile Tiger Bay Plant

Lateral will begin at milepost 20.58 on the Polk County Mainline and

will extend southward, where 20-inch extensions of the Tiger Bay Plant

Lateral will be constructed to deliver gas to the Hines, Polk and Payne

Creek Plants.

It is stated that the 24-inch, 46.60-mile Leesburg Plant Lateral

will begin at milepost 32.87 on the Polk County Mainline and will

extend northward into Lake County. It is further stated that the 34.68-

mile Oleander Plant Lateral will consist of 30-inch and 24-inch

pipeline beginning at milepost 20.68 on the Orange County Mainline and

extending to the east into Brevard County. It is also indicated that

the 18-inch Indian River and Cape Canaveral Plant Laterals will be

extensions of the Oleander Plant Lateral at its eastern end. Buccaneer

states that additional 16-inch laterals will be constructed from

various portions of the Florida Mainline to deliver gas to the Anclote,

Intercession City, Cane Island and Stanton Plants and to the City of

Lakeland, Florida.

Buccaneer states that it also will construct a new 75,000

horsepower compressor station (referred to as Buccaneer's Compressor

Station 1) which will be co-located with Transco's existing Compressor

Station 82 in Mobile County, Alabama, and will include a compressor

building with five 15,000 horsepower gas turbine-driven gas

compressors. It is stated that a metering and regulating (M&R) station

also will be constructed at the station to measure gas delivered into

the Buccaneer mainline.

Buccaneer also proposes to construct a liquids separation facility

at Anclote in Pasco County, Florida to collect liquids that have

condensed in the pipeline due to temperature and pressure drop. The

facility will be sited on a 68-acre tract, immediately north of Florida

Power corporation's Anclote Plant, and a 290 foot, single-span bridge

will be constructed across the Anclote Power Plant cooling water

outflow channel to access the site. Buccaneer also proposes to

construct M&R stations at each of the 13 proposed delivery points.

It is stated that the facilities will be constructed and operated

by Buccaneer's affiliate, Buccaneer Operating Company. Buccaneer states

that the construction and operation of the Buccaneer pipeline system

will have no significant impact on the quality of human health or the

environment. Buccaneer certifies that the proposed facilities will be

designed, constructed, operated and maintained in accordance with all

applicable safety standards and plans for maintenance and inspection.

Buccaneer proposes to provide a firm transportation service under

Rate Schedule FTS, an interruptible transportation service under Rate

Schedule ITS and a parking and lending service under Rate Schedule PAL,

under rates, terms and conditions in its pro forma tariff included with

the application. Buccaneer states that the shippers subscribing to its

firm transportation service will be given the option of paying a

negotiated rate or a cost-based recourse rate for service under its

firm rate schedule. Buccaneer proposes that the initial recourse rate

for its firm transportation service under Rate Schedule FTS will be a

daily reservation rate of $0.7690 per dt, which is based on the

straight fixed-variable rate design methodology. It is stated that the

initial recourse rate for interruptible transportation service under

Rate Schedule ITS and parking and loan service under Rate Schedule PAL

will be a commodity rate of $0.7690 per dt. Buccaneer states that its

customers also will be charged fuel and retainage and the ACA surcharge

as set forth in its tariff.

Buccaneer states that it is proposing a capital structure

consisting of 75 percent debt and 25 percent equity. Buccaneer

indicates that it assumes that the debt will bear interest at the rate

of 4.0 percent for a term of 25 years. Buccaneer states, however, that

it plans to seek the most favorable financing terms available in the

marketplace at the time the project is financed. Buccaneer

[[Page 60802]]

proposes that the equity component of its capital structure earn a

return of 14 percent, producing an overall after-tax return of 9.88

percent on Buccaneer's proposed capital structure. Buccaneer states

that its proposed return on equity and capital structure are consistent

with recent Commission orders on major construction projects, two of

which (Vector Pipeline L.P. and Alliance Pipeline L.P.) involve

optional certificate applications.

Buccaneer asserts that approval of the instant application is

required by the public convenience and necessity for the following

reasons:

A. As one of the fastest growing states in the country, Florida

projects that it will need over 10,000 megawatts of additional

electricity in the state by the year 2007 to keep up with its growing

population. Additional power generation capacity will be required to

meet this need and to avoid the electricity curtailments that Florida

experienced during the summer of 1998. It is expected that a vast

majority of this additional power generation will be fueled by natural

gas, thus placing natural gas in a pivotal, growing role in the

development of Florida's new and existing electric power generation

plants. For natural gas to fulfill that role, the Florida Peninsula

will require approximately twice the 1.5 million dt per day of pipeline

capacity currently provided by its only existing interstate pipeline.

The Buccaneer Project will help serve that requirement by providing

900,000 dt per day of new pipeline capacity to the state.

Moreover, the need for compliance with the Clean Air means that

existing industrial and commercial plants, which are now coal or oil

fueled, will be encouraged to switch to natural gas as their primary

fuel source. An increased supply of clean burning natural gas can

displace massive amounts of coal and heavy oil that would otherwise be

required for heating, cooling and generating electricity. The

environmental benefits are clear.

Natural gas emits virtually no sulfur dioxide or particulate

matter, very little nitrogen oxides and much less carbon dioxide than

other fossil fuels.

B. Section 157.104(c) of the Commission's regulations establishes a

rebuttable presumption that an optional certificate applicant's project

is required by the public convenience and necessity. Specifically, if

an applicant complies fully with the requirements of Sections 157.102

and 157.103 of the regulations, it is presumed that:

(1) The applicant is qualified to perform all the activities for

which certificate authorization is requested;

(2) The applicant is willing and able to perform acts and provide

service, as proposed, and to comply with the NGA and any applicable

regulations thereunder; and

(3) The proposed new service is or will be required by the present

or future public convenience and necessity.

Buccaneer states that it has complied with the filing requirements

of Section 157.102 and has satisfied the terms and conditions of

Section 157.103. In addition to satisfying these specific requirements

of the optional certificate regulations, Buccaneer indicates that the

Buccaneer Project furthers the Commission's goals of the optional

certificate program, which sought (1) to provide the full benefits of

competition to consumers by facilitating easier entry and exit from

services, (2) to ensure the most efficient scale of facilities by

removing certification as a barrier to entry, and (3) to provide

incentives for competition where none exists by maximizing the use of

alternative market access for producers and consumers. Buccaneer states

that it will promote these goals as a new market entrant, providing

additional markets for producers and enhancing competition in the State

of Florida.

It is further indicated that the Project will further enhance the

security of natural gas supplies to Florida, given that Buccaneer has

complied with the requirements and furthers the goals of optional

certificate regulations.

Any person desiring to be heard or to make protest with reference

to said application should on or before November 23, 1999, file with

the Federal Energy Regulatory Commission, 888 First Street, N.E.,

Washington, D.C. 20426, a motion to intervene or a protest in

accordance with the requirements of the Commission's Rules of Practice

and Procedure (18 CFR 385.211 or 385.214) and the regulations under the

Natural Gas Act (18 CFR 157.10). All protests filed with the Commission

will be considered by it in determining the appropriate action to be

taken but will not serve to make the protestants parties to the

proceeding. The Commission's rules require that protestors provide

copies of their protests to the party to parties directly involved. Any

person wishing to become a party to a proceeding or to participate as a

party in any hearing therein must file a motion to intervene in

accordance with the Commission's rules.

A person obtaining intervenor status will be placed on the service

last maintained by the Commission and will receive copies of all

documents filed by the Applicant and by every one of the intervenors.

As intervenor can file for rehearing of any Commission order and can

petition for court review of any such order. However, an intervenor

must submit copies of comments or any other filing it makes with the

Commission to every other intervenor in the proceeding, as well as 14

copies with the Commission.

A person does not have to intervene, however, in order to have

comments considered. A person, instead, may submit two copies of

comments to the Secretary of the Commission. Commenters will be placed

on the Commission's environmental mailing list, will receive copies of

environmental documents and will be able to participate in meetings

associated with the Commission's environmental review process.

Commenters will not be required to serve copies of filed documents on

all other parties. However, commenters will not receive copies of all

documents filed by other parties or issued by the Commission and will

not have the right to seek rehearing or appeal the Commission's final

order to a federal court.

The Commission will consider all comments and concerns equally,

whether filed by commenters or those requesting intervenor status.

Take further notice that, pursuant to the authority contained in

and subject to jurisdiction conferred upon the Commission by Sections 7

and 15 of the NGA and the Commission's Rules of Practice and Procedure,

a hearing will be held without further notice before the Commission or

its designee on this application if no motion to intervene is filed

within the time required herein, if the Commission on its own review of

the matter finds that a grant of the certificate is required by the

public convenience and necessity. If a motion for leave to intervene is

timely filed, or if the Commission on its own motion believes that a

formal hearing is required, further notice of such hearing will be duly

given.

Under the procedure herein provided for, unless otherwise advised,

it will be unnecessary for Buccaneer to appear or be represented at the

hearing.

David P. Boergers,

Secretary.

[FR Doc. 99-29101 Filed 11-5-99; 8:45 am]

BILLING CODE 6717-01-M